Internal Audit Services
Many of our potential customers inquire on how Internal Audit is different from External Audit:
- External Audit is a statutory requirement to review and attest that your company's accounting system comply with the Generally Accepted Accounting Practice (GAAP) and that your financial statements are reasonably true and fair.
- Internal Audit on the other hand, in addition to the above responsibility, focuses on revenue leakage, cost over-runs, process optimization, anti-fraud control testing and many other areas. The internal audit team, thus plays a role to give the management an independent snap-shot on the affairs of the business. This typically, help the management in better decision-making process with the insight it receives from this Internal Audit team. In simple terms, the role of an internal auditor is "to provide insight".
So we now come to the second question as to why must Internal Audit team be outsourced to an 'External' firm?
Independence. While many companies prefer to hire and maintain an Internal Audit team (simply because they are able to do so), we advise that the Internal Audit function must be outsourced to a third-party firm, for the simple reason that a person is not completely independent if your payroll is controlled by the management.
It prevents the Internal Auditor to call spade a spade, if the perception of his job performance is controlled by the very set of people whom he audits. On the other hand, an outsourced Internal Audit team does not carry the burden of striking the right impression, since his role is merely to state facts as he sees it.
We, at ABANA, are a team of independent, unbiased insight providers. We adopt a risk-based approach for our Internal Audit Services, thus enabling us to focus on High Risk Areas which the management would be keen to receive an insight on.